Investor Update September 2011 EnBW Energie Baden-Württemberg AG Investor Update Energie September 2011 braucht Impulse Investor Update September 2011 Important note › Unless indicated otherwise, all data contained hereinafter refers to the EnBW group and is calculated according to IFRS. › No offer or investment recommendation › This presentation has been prepared for information purposes only. It does not constitute an offer, an invitation or a recommendation to purchase or sell securities issued by EnBW Energie Baden-Württemberg AG (EnBW), a company of the EnBW group or any other company. This presentation does not constitute a request, instruction or recommendation to vote or give consent. All descriptions, examples and calculations are included in this presentation for illustration purposes only. › Future-oriented statements › This presentation contains future-oriented statements that are based on current assumptions, plans, estimates and forecasts of the management of EnBW. Such future-oriented statements are therefore only valid at the time at which they are published for the first time. Future-oriented statements are indicated by the context, but may also be identified by the use of the words “may”, “will”, “should”, “plans”, “intends”, “expects”, “believes”, “assumes”, “forecasts”, “potentially” or “continued” and similar expressions. › By nature, future-oriented statements are subject to risks and uncertainties that cannot be controlled or accurately predicted by EnBW. Actual events, future results, the financial position, development or performance of EnBW and the companies of the EnBW group may therefore diverge considerably from the future-oriented statements made in this presentation. Therefore it cannot be guaranteed nor can any liability be assumed otherwise that these future-oriented statements will prove complete, correct or precise or that expected and forecast results will actually occur in the future. › No obligation to update the information › EnBW assumes no obligation of any kind to update the information contained in this presentation or to adjust or update future- oriented statements to future events or developments. 2 Investor Update September 2011 We want to talk about… EnBW at a glance Well positioned player in the European utilities sector Utilities environment Serious challenges ahead EnBW’s strategy Focused into the future Financial Policy Committed to an A rating Hybrid issue Rationale and key facts 3 Investor Update September 2011 EnBW at a glance: Well positioned in the European utilities sector › Number 3 in Germany with approx. 6 million customers Based on strong roots in › Within Top 10 in Europe in terms of generation capacity Baden-Württemberg › Based in Germany’s strongest industrial region (14.5% of GER GDP) › Strong and reliable shareholder base (State BW, local municipalities) Our generation › Electricity generation and trading segment contributed 84% to adjusted EBIT in 2010 portfolio is the › Cleanest German generation fleet with avg. CO2 emissions of 299g 1 performance driver CO2/kWh › Currently 9% of revenue outside of Germany Active in selected › Attractive fundamentals in key foreign markets (e.g. Turkey: foreign markets Capacity gap, CZ: Strong local growth in capital area) Business activities in three different markets2 Wholesale markets Regulated markets End-customer markets (Procurement, generation, trading) › Electricity grids: 152,528 km (Business and retail)3 › Transmission: 3,674 km › Procurement: fuels (gas, coal, oil), › Distribution: 148,854 km › Electricity: 68.9 TWh emissions allowances (5.4 million customers) › Generation portfolio: 15,498 MW › Gas grids: 15,809 km › Gas: 53.6 TWh › Trading: energy (electricity): 65.5 (0.4 million customers) TWh › Renewable energies according › Gas storage in progress to EEG (German Renewable › Heat: 5.3 TWh Energies Act) › Further energy and environmental services 4 1compared to its peers; 2 annual report 2010, all figures stated as of 31 December 2010; 3 including all customers directly supplied through trading unit of EnBW Investor Update September 2011 Challenging environment for German utilities › Energy concept 2050 and targets 2020: 1 1 Reduce consumption by 50% (target 2020: 20% ) and CO2 emissions by min. 80%² (target 2020: 40%²). Increase of share of renewables to 80%3 (target 2020: 35%3) › Change in energy concept by the German government: › Shut-down of 8 nuclear power plants 2011 › Reduction in life-time of nuclear power plants › Nuclear fuel rod tax (2011-16) › Reduced price level on forward markets 2012 › Full auctioning of CO2 emission allowances from 2013 onwards 2013 Implications for EnBW › Short-term implications: › Shutdown of two smaller reactors (total capacity: 1,766 MW) › Abandonment of earlier lifetime extensions for larger reactors GKN II and KKP 2 › However: › Longest remaining nuclear lifetime of all German nuclear power plants operators › Very modern, low CO2, and flexible conventional fleet 5 › Strong expertise in renewables 1 compared to 2008, 2 compared to 1990, 3 as percentage of gross consumption of electricity Investor Update September 2011 EnBW: First six months 2011 reflect negative impact of changed environment Adjusted EBIT in € m. Neutral result in € m. (as of 30 June 2011) -24% 1.159 Non-operating Non-operating Non-operating EBITDA EBIT group net profit 878 -562.3 -606.1 -1,043.0 Jan. - Jun. 2010 Jan. - Jun. 2011 › 86% of reduction relates to shut Effects relating to nuclear down of two nuclear power plants › and nuclear fuel tax power/moratorium: € 594 million › Remainder relates to gas segment: › Impairment of EWE (€ -371 million) and deconsolidation of GESO and EVN (€ - 245 million) weather-related volume impact 6 Investor Update September 2011 The change-over in energy politics leads to a severe reduction of adjusted EBIT on group level EnBW Current outlook 2011 Outlook 2011 Outlook 2011 Interim report Q2 2011 Interim report Q1 2011 Annual report 2010 Adjusted EBIT electricity generat. & trading significantly falling significantly falling falling Adjusted EBIT electricity grid and sales significantly falling significantly falling significantly falling Adjusted EBIT gas falling falling falling Adjusted EBIT energy & environm. services stable falling falling Adjusted EBIT on group level - 20 % to - 25 % - 15 % to - 25 % - 10 % to - 15 % 7 Investor Update September 2011 Clear strategic initiatives being implemented to cope with sector challenges 1 › Maintain an integrated energy supplier in Germany and become one in Sharpening of the Czech Republic EnBW’s business model › Realise profitable growth in the areas of renewable energies, energy solutions for customers, energy management and energy efficiency 2 Adjustment › Reduction the investment programme of investment/ › Increase divestments while maintaining the general strategic alignment divestiture programme › Capital employed / CAPEX optimization via cooperation 3 › Implement additional efficiency measures under the “FOKUS” programme. Present target of a total volume of € 300 million Efficiency measures p.a. as of 2013 will be significantly exceeded 4 Strengthening of › Take measures to support the capital structure of EnBW EnBW’s capital › Dividend model structure 8 Investor Update September 2011 1 Future business model will be based on two strategic directions Low carbon generator Offering distributed energy solutions Main focus of development: Main focus of development: › Maintaining a sustainable, low CO2 generation portfolio › Decentralized renewable energies Partnering › Stable generation portfolio models › Cooperation with cities as basis for further expansion and municipalities in renewables (ie. wind + hydro) › Introduction of platform solutions › Optimization of generation fleet to obtain economy of scales › Gas-fired power plants 9 Investor Update September 2011 1 Expansion of wind energy in Germany Wind onshore › EnBW currently operates 92 onshore wind power units with an overall output of 149 MW › EnBW investigates a pipeline of projects to be acquired of over 100 MW. Further cooperations with developers are under way Wind offshore › Intention to develop four offshore projects in the Baltic and North Sea (1,200 MW) in the next few years › The first commercial wind farm in the Baltic See, Baltic 1 (50 MW), successfully started operations in May 2011 › For Baltic 2 (288 MW) all major contracts have been awarded for the construction work in 2012. Start of operation is scheduled for 2013 › Project development started for Hohe See, one of the projects in the North Sea 10 Investor Update September 2011 1 Expansion of hydropower generation Run-of-river Laufwasser › Construction of additional turbine (38 MW) at Iffezheim hydroelectric power plant together with EDF (new total capacity 138 MW) › Construction of Rheinfelden hydroelectric power plant (100 MW) Rheinfelden› Development of additional capacity in Turkey Pumped Storage › Projects for pumped storage under consideration (approximately 2,000 MW)1 Esslingen › Testing of alternative storage technologies through R&D (eg e-mobility, SNG) 11 1 Total capacity including third-party share Investor Update September 2011 1 Assessment of profitable gas-fired power plants Status quo EnBW Gas strategy › Consolidation of sales activities › Development of a diversified supply portfolio › Commercial optimisation based on expertise in electricity business › Efficient operation of grid activities Gas to Power › Expertise and competency in operating large-scale plants › Realisation before